The property markets in Cyprus and Greece remain positive and offer attractive investment opportunities despite inflationary pressures and rising interest rates affecting much of Europe.
This was stated by Cyprus-based Danos International Property Consultants and Valuers on Tuesday 20th August.
According to the analysts, foreign investment continues to drive the residential sector in both countries. At the same time, the local population's demand for property is also playing an important role.
This is confirmed by a recent Eurostat report. In particular, it states that the House Price Index (HPI) in the euro area fell by 0.4 per cent in the first quarter of 2002 compared with the same period a year earlier, while it rose by 1.3 per cent in the EU. The year-on-year increase in house prices was also noted by the Central Bank of Cyprus, which recently said that property prices in Cyprus rose by 7.8 per cent in the first quarter of 2024, slightly down from 8.3 per cent in the fourth quarter of 2023.
Meanwhile, the price of apartments rose by 13.9 per cent and houses by 4.7 per cent. Interest in luxury properties in Cyprus continues unabated, with total sales of such properties reaching €2 billion in the first quarter of 2024. This trend is expected to continue until at least the end of the year.
According to Danos, foreign buyers will purchase 6.9 thousand properties in Cyprus in 2023, which is 16% more than in 2022.
Several factors will influence sales in the future. In particular, the expected reduction in interest rates by the European Central Bank will encourage local buyers to invest in residential property. It is also predicted that an increase in the supply of residential property will balance the market over time. According to the Cyprus Land Registry, the property market is booming. The latest sales figures were the best since 2008.
In Greece, data from the Bank of Greece shows that the average house price in the southern suburbs of Athens reached 3.75 thousand per 1 m2 in the first quarter of 2024, the highest in the country. Piraeus recorded the highest annual growth of 28.9 per cent. Nationally, apartment prices in Greece rose by 10.4 per cent over the year, with regional differences: Athens by 9.4 per cent, Thessaloniki by 12.2 per cent, other cities by 10.3 per cent and other regions by 12.1 per cent.
Demand for commercial property in Cyprus reached a five-year high, recovering from the COVID-19 pandemic. Foreign investment fuelled demand for office space, particularly modern Grade A offices.
Rental prices in Cyprus increased by 8.5 per cent year-on-year in the first quarter of 2024, around 10 per cent above 2019 levels. Office rental prices, which bottomed out in the first quarter of 2022, have now risen by an average of 14 per cent.
Limassol and Larnaca are the leading destinations for property investment in the Cypriot market, while Nicosia is showing a steady recovery. Despite increasing supply, office rental prices are expected to remain high due to continued demand and new standards. The commercial property market in Cyprus is particularly attractive to foreign companies attracted by the island's high quality of life, strategic location and favourable tax regime.